Easy Cost Planning

A method of costing that enables costs to be planned quickly and easily for objects such as:

• Internal orders
• Work breakdown structure elements
• Internal service requests
• Appropriation requests

This method is based on costing models, which facilitate cost planning by the cost planner.

ECC number

A tax number assigned, in India, by the Department of Revenue to legal and natural persons liable to excise duty.

The taxpayer is required to obtain a separate ECC number for each registered premises (for example, factory, warehouse, or dealer's premises).

economic bloc

A group of countries, such as the EU, that form a unit for mutual support and joint action in economic interests.

EDI invoice

An electronically transmitted invoice.

effective price

A price calculated taking all pricing conditions into account (for example, taxes, delivery costs, discounts, or miscellaneous provisions).

efficiency variance

The difference between the actual efficiency and the planned efficiency.

Example

If the manufacturing process takes less time than planned, this changes the cost basis for the activity type accordingly. Such a change results in an efficiency variance being reported for the cost center or order.

Electronic Data Interchange

The electronic transfer of structured data between two data processing systems.

For Foreign Trade, this supports the Automated Export System (AES).

eliminating entry

The entries that, together with subgroup-dependent consolidating entries, transfer the summarized financial statements into the consolidated financial statements.

Eliminating entries are made, for example, for:

• Payables and receivables
• Revenue and expense
• Profit and loss in transferred assets
• Profit and loss in inventory

Eliminating entries are performed on a company pair level.

elimination difference

The difference that occurs when payables and receivables, or revenue and expense, are eliminated against each other.

When data is entered in transaction currency as well as local currency, these differences can be further classified as currency related, and other differences.

elimination of IC payables & receivables

A consolidation activity that eliminates group-internal receivables (intercompany, or IC) and payables.

The terms, payables and receivables,are far reaching. For instance, they also encompass bonds, loans, appropriations, accruals and deferrals, unearned revenue, and so on, as long they are based on group-internal relationships.

From the group's point of view, the consolidated balance sheet may only include payables to and receivables from companies outside of the group, or companies that are not consolidated.

If the valuations of the group-internal debt or receivable items differ between the two companies, a difference occurs during their elimination. The elimination difference can be posted with or without affecting net income.

elimination of IC profit and loss

The intercompany (IC) profits or losses that can occur require elimination, when assets are transferred from one internal trading partner to another.

The elimination of IC profit and loss applies to business transactions that affect transferred assets as well as inventory.

elimination of IC profit/loss in inventory

An object in inventory that requires that the inventory-managing consolidation unit reports which internal trading partner supplied which inventory items.

The IC profit or loss is the difference between the book value on the individual financial statement and the production cost.

A positive difference represents intercompany profit, which is eliminated by making an adjustment down to the lower value, in accordance with the group's point of view.

A negative difference represents an intercompany loss, which is eliminated by making an adjustment up to the (higher) production cost.

elimination of IC profit/loss in inventory

An object in inventory that requires that the inventory-managing company identifies the internal trading partner that supplied specific inventory items.

The IC profit or loss is the difference between the book value on the individual financial statement and the production cost.

A positive difference represents IC profit, which is eliminated by making an adjustment down to the lower value, in accordance with the group's point of view.

A negative difference represents an intercompany loss, which is eliminated by making an adjustment up to the (higher) production cost.

elimination of IC profit/loss in transferred assets

The following eliminations must be made in the consolidated financial statement, when an asset is transferred between two companies within a subgroup:

• Elimination of the asset retirement at the retiring company and the elimination of the asset acquisition at the receiving company
• Elimination of the calculated intercompany (IC) profit or loss with an effect on net income
• Depreciation adjustments to the IC profit or loss

The IC profit or loss is calculated as the difference between the gain from retirement and the retirement book value.

elimination of IC profit/loss in transferred assets

The following eliminations must be made in the consolidated financial statements, when an asset is transferred between two companies within a subgroup:

• Elimination of the asset retirement at the retiring company and the elimination of the asset acquisition at the receiving company
• Elimination of the calculated intercompany (IC) profit or loss with an effect on net income
• Depreciation adjustments to the IC profit or loss

The IC profit or loss is calculated as the difference between the gain from retirement and the retirement book value.

elimination of intercompany revenue and expense

A consolidation activity in which all revenue and expenses from delivery and service relationships between the companies of a consolidated group are eliminated according to the single entity theory.

The regroupings that are also necessary when the period accounting procedure is used (sales revenue against changes in stock or other capitalized services) are realized in FI-LC as reclassifications.

The elimination of revenue and expense is done in company pairs; a possible difference can be analyzed according to differences caused by different exchange rates or other causes, and then posted.

elimination of investment income

The elimination of dividends received by an investor company against the dividends distributed by its investee company.

If a profit transfer agreement is in place, this term implies the elimination of revenue and expense incurred by the transfer of profit.

elimination set

A set that contains the financial statement items that are to be eliminated against each other.

Example

For the elimination of intercompany payables or receivables all the payables and receivables items are contained in one elimination set.

employee responsible

A partner of partner type Personnel (PE) that is responsible for processing a business transaction, (business partner contact, sales order) or for alltransactions with a customer.

employee trip

An employee's business trip.

An employee trip includes the change of location to and from another locale because of a temporary external activity.

Example

Employee: Heinz Mayer

Trip duration: from 01.03.1996 10 am to 01.05.1996 10:15 pm

Main destination: ABC AG, Hamburg, Germany

Trip type statutory: business trip

Travel expenses reimbursement type: - accommodation single

- meals per diem

- travel costs flat rate

Distance traveled: 678 km

employer identification number

A tax number assigned, in the United States, by the Internal Revenue Service to business entities.

enclosure

An item sent with a letter or product information in a direct mailing campaign, such as a free shampoo sample, or entry form for a prize draw.

end point

A transportation connection point where a leg ends.

engineer-to-order

A manufacturing environment in which complex production activities under essentially one-off conditions are undertaken for a specific customer.

The production structures are managed using a work breakdown structure. At this level, the following planning steps for the project are performed:

• Budget management
• Revenue planning
• Finance planning
• Cost planning

The production processes are managed using a network. The dates, resources, and associated costs are planned at this level.

enterprise

A business system (economic unit) whose purpose is the extraction, production, or distribution of goods or the provision of services.

An enterprise has a variety of internal structures reflecting the requirements of:

• Accounting
• Logistics
• Personnel

Externally, an enterprise can be a legally independent company or a group of legally independent companies.

enterprise organization

A representation of the structure of an organization according to logically related units.

The following organizational units and their dependencies can be represented within this structure:

• Controlling area
• Company code
• Cost center group
• Cost center
• Profit center group
• Profit center
• Organizational unit (HR organizational structure)

entry aid

A representation of a combination of characteristics.

Selecting an entry aid eliminates the need to enter the individual characteristic values for assignment to profitability segments or for the manual entry of actual line items.

entry mode

A detail of the source of payment card data, for example, entered manually or by card swipe.

environment

A group of functions that enable access to information in the SAP R/3 System or external systems for the purpose of planning activity-independent or activity-dependent costs.

environment

A group of environment functions that supplies cost driver information from the SAP environment (and possibly external systems) to define a template.

A template is always created for a specific environment. It can access all functions that belong to that environment and its sub-environments.

The typical environment offers only those functions that are useful in the particular context.

Example:

The standard system contains environments for allocating process costs to production orders and sales orders using templates.

equity method

A method used to consolidate affiliated companies, as well as subsidiaries or joint ventures, that are not consolidated using the purchase or proportional methods.

The individual financial statement data (also referred to as reported financial data) of an equity company is not taken into account in the consolidated financial statements. Therefore you do not need to enter the data into the Consolidation system.

Only changes in the stockholders' equity of the company are taken into consideration; these affect the investment value stated in the consolidated balance sheet.

Therefore, the term "valuation method" also applies here.

equivalence number

The quota of a single co-product used in the production process.

Equivalence numbers are specified in the apportionment structure in the material master of the leading co-product.

equivalence number

The weighting number used in cost center planning (CO-OM-CCA) to distribute the planned (fixed) costs that were not planned by activity over the individual activities of a cost center.

error-tolerant FIFO valuation

A value determined after an exceptional situation arises during the FIFO valuation process.

When the stock figure for a material to valuate exceeds the total quantity resulting from inward movements exceptions can be defined.

European Free Trade Association

An organization established in 1960 by the Stockholm Convention to eliminate tariffs and other restrictions on trade between European Free Trade Association (EFTA) members.

EFTA currently comprises Iceland, Liechtenstein, Norway and Switzerland.

evaluated receipt settlement

A procedure for automatic settlement of goods receipts.

Evaluated receipt settlement involves an agreement between the vendor (creditor) and the buying entity that the former does not issue invoices for purchasing transactions. Instead, the invoice document is posted automatically in the buying entity's system on the basis of data from the PO and goods receipts. The use of this data precludes invoice variances (too high a price, for example).

evaluation group

A field in the asset master record that can be used for classifying assets.

You can use an evaluation group to:

• Create reports on the defined evaluation groups
• Access individual assets using a matchcode defined for the evaluation group

evaluation record

In the vendor evaluation system, the data record in which the evaluation of a vendor is stored.

The evaluation record consists of a header and items.

The header contains the overall evaluation of a vendor and general information. The items contain the scores for the individual main criteria.

Ex Works

A declaration that the seller has fulfilled the obligation to deliver after making the goods available at the seller's premises to the buyer.

The seller is not responsible for loading the goods on the vehicle provided by the buyer or for clearing the goods for export, unless otherwise agreed. The buyer bears all costs and risks involved in taking the goods from the seller's premises to the desired destination.

In most parts of the world, Ex Works means that the shipper loads the vehicle.

exception rule

A principle consisting of a rule basis and a threshold value.

exchange rate

The relationship between two currencies.

This rate is used to translate an amount into another currency.

exchange rate comparison

A process facilitating the translation of prices from different sources into other currencies.

exchange rate difference

The amount arising where a foreign currency amount is translated at different exchange rates.

exchange rate indicator

A classification of exchange rates for foreign currencies.

Example

Current rate (spot rate), average rate, or historical rate.

exchange rate type

A key representing a type of exchange rate in the SAP System.

Example

You can define a buying rate, bank selling rate, or average rate as a particular exchange rate type. This is then used when translating or converting currency amounts in the SAP System.

exchange rate variance

The variance that occurs when the price of a resource in the object of comparison has changed because of fluctuations in the exchange rate.

Example:

The price of a raw material has risen above the planned price because the exchange rate for the currency in which the material is listed has changed.

excisable

Subject to excise duty.

excise commissionerate

An administrative body, in India, that assesses and collects excise duty. It reports to the Central Board of Excise and Customs.

There are around 90 commissionerates in India, and they are subdivided into excise divisions, which in turn are divided into excise ranges.

excise division

A subdivision of an excise commissionerate, in India.

In turn, excise divisions are split up into excise ranges.

excise document number

An identification number printed on an excise document and used by the excise authorities to identify the document.

excise duty

A tax, in India, on the manufacture of goods, payable by manufacturers when goods leave their premises.

Different goods are subject to different sorts of excise duty as follows:

• Basic excise duty
• Special excise duty
• Additional excise duty
• Cess

excise group

A unit within an excise registration, in India, which keeps its own set of excise records.

Whereas the excise registration reports to the excise authorities, the excise group is a purely internal organizational unit. Each excise group keeps records of all transactions that have to be reported to the excise authorities. When the time comes to present these records to the authorities, the excise registration compiles the information from all of its excise groups.

excise invoice

A business document, in India, that accompanies any deliveries (or other movements) of excisable goods.

It states what excise duty is due on the goods.

excise range

A subdivision, in India, of an excise division.

The excise ranges are responsible for issuing ECC numbers.

excise register

A running record of goods receipts and goods issues, as used in India. Excise registers document goods transactions for the purposes of controlling excise.

Manufacturing plants are required to keep registers RG 23A, RG 23C, and RG 1; depots keep register RG 23D.

excise registration

An entity in India that is entitled by law to produce any goods liable to excise.

Each entity is assigned its own excise registration number.

Every factory that manufactures excisable goods is required to register separately, so that a business with seven factories requires seven registrations.

excise registration number

The number used to identify an excise registration (India only).

When a business registers with the local excise authorities, the authorities issue it a separate number for each registration.

exclusive bonus quantity

A form of free goods in which the customer receives free goods and the goods he ordered.

Example

If you buy four coffee machines, the vendor gives you a free packet of coffee. This is delivered to you but you are not invoiced for it.

Execution Service

A process triggered by cost planning with the Easy Cost Planning function.

For internal orders, work breakdown structure elements, and internal service requests, once you have planned the costs, you can trigger the following processes on the basis of the costing data:

• Purchase requisitions
• Purchase orders
• Reservations
• Goods issues
• Internal activity allocations with and without workflow

Execution Services

exempt tax invoice

A tax invoice, in South Korea, that is issued to cover a tax-exempt or tax-free transaction.

expanded withholding tax

A type of withholding tax in the Philippines for which the taxes withheld on income payments are estimated.

Income recipients are still required to file a tax return, and either pay the difference between the tax withheld and the tax due, or they are refunded accordingly.

An example of an income payment subject to expanded withholding tax is a medical fee paid to a medical practitioner.

expense

The expenses incurred by a company within a specific period for:

• Goods
• Services
• Public charges, rates and taxes

These expenses are balanced against revenue in the profit and loss statement.

expiration date

The date on a payment card after which the card is invalid.

explosion level

The chosen level in a hierarchical structure at which data is displayed by the SAP System.

You can specify the explosion level when exploding base planning objects, for example.

export

The transport or sending of goods abroad for trade or sale.

The temporary or permanent transfer of goods out of a customs territory.

export control class

A unique code for classifying materials that require a license. Each legal regulation has a list of the CAP (Common Agricultural Policy) list numbers for which export licenses are required.

export credit insurance

An insurance against loss through the inability of a customer to pay.

It is taken out mainly on longer-term receivables for the delivery of goods and services.

export declaration for EC export reimbursements

Document that is required for exporting Common Agrigultural Policy (CAP) products.

export ledger

An additional ledger assigned to a special purpose ledger if the data of the special purpose ledger is to be sent from a local system to a central system.

The export ledger stores the balances of all previous data transfers. If data is exported more than once within one period, only the difference amounts from the last data transfer are sent to the central system.

export procedure

The conversion of "domestic merchandise" to the status of "foreign merchandise".

Customs regulations allow goods with this status to be transported out of a defined Customs territory.

exporter

A person responsible for filing the export declaration, who is the owner or authorized keeper of the goods up to the time the goods are accepted by the intended recipient.

Export-Import Bank of the US

An agency of the United States government that arranges for guaranteed credit for export shipments.

external procurement

The procurement of raw materials, operating supplies (MRO items), trading goods, and services from external suppliers for the organizational units of an enterprise that need such items or services.

External Services Management

A program that supports the entire bid invitation, award, and acceptance cycle for the procurement of externally performed services.

The program offers a service master file in which you can store descriptions of all the services that are to be procured. A separate set of specifications is created for each specific procurement project. When creating such specifications, you do not need to enter each individual service or item of work. Instead, these are copied from the master data. The use of this referencing technique means that data only has to be entered once - the manual entry effort is thus reduced to a minimum.

MM External Services Management is fully integrated in Purchasing. This means that service specifications are created within the purchasing documents "request for quotation" (RFQ), "purchase order" (PO), or "contract."

You can either enter precise service descriptions or set value limits up to which unplanned services can be entered. After the services have been performed, they are recorded using service entry sheets that show exact quantities and values. The service entry sheet then constitutes the basis for the invoice verification process for externally performed services.

external shipping process

A customs procedure involving the transfer of foreign merchandise between two locations in a customs territory without levying customs duties or taking other trading measures into consideration.

The transfer of such goods takes place as a shipping procedure using a carnet TIR, carnet ATA, Rhine Manifest, NATO preface 302, or through the postal service.

external supplier

A source outside an enterprise's organization that supplies materials or services in return for payment.

In SAP materials management, an external supplier is called a "vendor." In documents, the terms "vendor" and "supplier" are used. A supplier can be internal.

external trading partner

An external trading partner is a company that is not controlled by any company within the group but has relations with companies of the group.

external value added

An indication of whether a business process is relevant to, or has a deciding influence on, the production of a product or service from an external standpoint.

The degree of influence on the value added is illustrated by means of a ranking order.

extract

A file that contains the report data requested.

When you save reports in an extract, you can access the report data stored in the extract at any time without having to reselect data from the database.

extract

A file that contains the required report data.

If you save reports in an extract, you can call these reports up at any time without having to select data from the database again.

extra-European Union trade statistics

The exchange of goods between European Union member nations and countries outside the European Community.

extrapolation

The process performed during a physical inventory based on samples.

In the extrapolation process, the system provides an estimated value for the entire stock population based on the adjusted book inventory balance after inventory differences have been posted.

If inventory differences have only been posted for some of the selected stock management units, the extrapolation is provisional.

When all physical inventory postings have been made, a final extrapolation is performed.

After final extrapolation, the system determines whether or not the sample-based physical inventory was successful.

EXTRASTAT declaration

A monthly customs declaration that provides EU authorities with statistics on trade between EU member states and non-EU countries, for example, trade between Germany and the US.

There is an EXTRASTAT declaration for exports and one for imports.